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Help to Buy loan scheme

Help to Buy is a government-funded low-interest equity loan scheme for first-time buyers. See how you can benefit from an affordable way to buy new-build homes in England.

What is Help to Buy?

Through the Help to Buy scheme you can get a low-interest loan towards your deposit. This is called an equity loan. This can help you to buy a home with as little as a 5% deposit of your own.

The government will lend from 5% up to 20% (40% in London) of the cost of a new-build home. The rest of the cost is covered by a mortgage from lenders associated to the scheme.

The scheme is available in England only.

Benefits of the Help to Buy scheme

  • Low interest: the loan is interest-free over the first five years. This gives you the opportunity to save after paying the initial fees. After that point, interest rates are competitively set at 1.75%.
  • Lower borrowing: the financial support means you need to borrow less on your mortgage.
  • Smaller deposit: it’s quicker for you save the amount you need.

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How Help to Buy works

To buy a home with a Help to Buy equity loan:

  • you need a 5% deposit
  • the government will lend you up to 20% (40% in London)
  • you need a mortgage of up to 75% for the rest (55% in London).

So, for example, you could buy a £200,000 home outside of London like this:

  • 5% deposit = £10,000
  • 20% government loan = £40,000
  • 75% mortgage = £150,000

You have to pay equity loan fees, but not for the first five years. In the sixth year, you’ll be charged a fee of 1.75% of the loan’s value. The fee then increases every year, according to the Retail Prices Index (RPI) plus 1%. These fees don’t count towards paying back the loan.

You have to pay back the loan after 25 years, or when you sell your home, whichever comes first.

You can pay back part or all of your loan at any time. The smallest repayment you can make is 10% of the market value of your home.

Regional property price caps

The maximum price of a home bought through Help to Buy is subject to regional caps.

  • North-west England = £224,400
  • North-east England = £186,100
  • Yorkshire and the Humber = £228,100
  • West Midlands = £255,600
  • East Midlands = £261,900
  • East of England = £407,400
  • South-west England = £349,000
  • South-east England = £437,600
  • London = £600,000

These caps are currently valid from April 2021 to March 2023.

Eligibility

To qualify for Help to Buy you must be a first-time buyer. And your home must be bought from a registered Help to Buy development. In addition, the home you buy must:

  • be a new build
  • cost less than £600,000
  • be the first home you own
  • not be sublet or rented out after you buy it.

The scheme has been updated and will now run until March 2023.

Applications for the previous Help to Buy: Equity Loan scheme ended on 15 December 2020, if you reserved under this scheme you have until 31 May 2021 to legally complete your purchase.

How to apply

Help to Buy agents administer the scheme for Homes England. The agents in the area want to buy in can guide you through the options available and check your eligibility and affordability. You should also talk to an independent financial adviser to find the right mortgage to suit you.

Find out more on the Help to Buy website

Help to Buy FAQs